As the stress rises, an employee’s sense of cynicism and detachment increase. That can lead to a sense of ineffectiveness and a lack of accomplishment. As those feelings continue, the concept of paying attention to the future, such as updating retirement plans, can fall to the wayside.
Burnout leads to terrible decisions. Even if your employees aren’t burning the midnight oil at your company, their spouses may be or they may be overwhelmed with caregiving responsibilities for a parent or child. As they burn the candle at both ends, they may be making financial decisions that are equivalent to lighting piles of money on fire. While burnout doesn’t have a specific diagnosis code in the medical books or psychological manuals, the results of overworking with limited flexibility are so similar that burnout can be considered a syndrome.
How can burnout effect decisions about retirement? Symptoms of burnout are usually thought of as fatigue, exhaustion (both physically and emotionally) they can also include sleeplessness and insomnia. Each of those symptoms impacts concentration and attention, decreases in both would make even the savviest saver make mistakes. But forgetfulness and lack of concentration aren’t the only ways that burnout can impact retirement readiness.
Decision-making ability decreases the more decisions are made. Employees (or their spouses) that are constantly weighing options, like whether to leave a job or whether to move a parent into a nursing home, may be depleting their decision-making skills by running through options repeatedly without getting to a result. For those that do have to make constant trade-offs, like juggling elder care with child care and finagling the details of dinner on the run, their mental energy reserves run lower and lower. That means that in addition to the lack of concentration that a burned out employee may have, their ability to weigh options is suffering.
And even worse, the biggest impact of burnout on an employee is lack of productivity. This may be the biggest area of impact on retirement readiness. Employees that put off enrolling in your company’s retirement benefits will continue to shuffle that task down the to do list until its forgotten. Putting off making retirement contributions means your employees are losing out on the positive benefits of compound interest or any matching options that your company may offer.
Scientific studies have shown that burnout has impacts on cognitive functioning, including activities in specific parts of the brain (the amygdala and prefrontal cortex). The impact on these two areas, and the activity between them, results in difficultly controlling negative emotions – meaning, employees who are burned out are more likely to experience stress more deeply than others.
At its worst, burnout robs your previously passionate employee of their ambition and idealism. As the stress rises, an employee’s sense of cynicism and detachment increase. That can lead to a sense of ineffectiveness and a lack of accomplishment. As those feelings continue, the concept of paying attention to the future, such as updating retirement plans, can fall to the wayside. Some employees may even decide that saving for retirement is pointless as they won’t be able to continue in their roles for much longer. That sense of fatalism can be hard to overcome.
How can you, as a plan sponsor, help employees who may be headed towards burnout keep from impacting their future finances? The most important element may be that employees headed towards burnout may not be motivated to take care of themselves. Instead, asking them to watch out for burnout among their coworkers may help the most. While that may sound counterintuitive to ask an overwhelmed employee to take on a new task, an employer who sends signals that it values and wants to create a cooperative and caring environment may help employees feel that the sense of bureaucracy that could be interfering with their work isn’t insurmountable. Employees may also spot signs in others before they see those signs in themselves.
Adding informational pieces about burnout out to regular internal communications (like health and wellness emails, flyers in public places and other regular communications) can be helpful. These informational pieces should also include resources for employees nearing burnout such as employee assistance programs. Plan sponsors can also hold informational workshops on burnout and how to spot the signs of burnout in coworkers. Finally, plan sponsors can help reinforce healthy work practices through protecting employee off time and through ensuring employees work processes work for them.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.
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